Paul Krugman says the economy suffers from a "liquidity trap" due to insufficient demand. In my view, we're in an "inequality trap" as the One Percent, big corporations and banks hoard cash, starving small businesses for capital.
It’s a truism of pop Keynesian economics that consumer spending drives the economy; if spending slows in a recession; government must make up the difference. In reality, consumer spending merely signals what consumers want; producers may be unable or unwilling to deliver. Government spending may compensate—or make matters worse—depending on
